UNCERTAINTY over the future of China's steel giant, the Shougang Corporation, has aroused fears among local analysts that the group's business expansion in Hong Kong will be reduced after changes to top management. Since November, 1992, Shougang has taken controlling interests in five Hong Kong companies and made investments in a further three, transforming itself into a business empire with a Hong Kong market capitalisation of $11 billion. Shougang has majority stakes in five listed companies: Shougang International (engaged in steel trading), Shougang Concord Grand (a property development arm), Shougang Concord Technology (an electronics manufacturer), Eastern Century (a non-ferrous metal subsidiary) and Hoi Shing, its construction arm. It has also taken an equity stake in several listed companies; 9.9 per cent in Companion Holdings, nine per cent in Paul Y-ITC and one per cent in Four Seasons Mercantile. The rapid expansion conducted under the chairmanship of Zhou Beifang has been aggressive, particularly outside the mainland China market. Shougang raised about $7 billion through bond and rights issues between 1993 and 1994, which helped fund injections of mainland assets into Hong Kong-listed companies. Shougang is a close business partner of local tycoon Li Ka-shing, a tie that began during the back-door listing sought by Shougang through the buy-out of Tung Wing Steel in late 1992. Mr Li and fellow businessman Martin Kwok Ying-chuen were instrumental in establishing the Shougang empire in the territory. Cheung Kong helped Shougang to buy Tung Wing Steel and still holds about a 12 per cent stake. Tung Wing Steel was renamed Shougang Concord International Enterprises in June, 1993. In May, 1993, Tung Wing Steel carried out $1.8 billion rights issues to inject assets from Shougang's parent company. The move had been questioned by local regulators, requiring the company to disclose more information about the transactions. In June, 1993, Shougang (HK) announced the appointment of Deng Zhifang, the second son of Deng Xiaoping, as deputy chairman and chief executive officer of Shougang Concord Grand. At the same time, the group announced it was to undergo restructuring to rationalise its corporate structure so that each company was arranged to engage in different industries.